The Risks of “Off-Channel” Communications: How GiGCXOs’ AICompliance360™ Keeps Firms Compliant
In recent years the Securities and Exchange Commission has stepped up enforcement against financial institutions that fail to maintain and preserve electronic communications, with particular focus on so called off channel communications. These include business conversations conducted through personal email, text messages, and third party messaging apps, channels that are outside firm-approved systems and therefore not archived as required under federal securities laws. The agency’s campaign is designed to ensure that all business interactions are properly recorded and available for oversight.
Since 2021 the Commission has charged about 60 firms with off channel record keeping violations, imposing more than $2.7 billion in fines and penalties. Among the most notable actions were settlements with 26 financial firms that agreed to pay a combined $390 million to resolve charges tied to record-keeping failures. Investigators uncovered widespread and long running reliance on unapproved communications, which regulators said undermined their ability to conduct full investigations and enforce compliance obligations.
The challenge for firms is clear. With employees increasingly using personal devices and a growing mix of digital platforms, monitoring and archiving every business-related conversation has become extremely difficult. Traditional compliance programs often lag behind these shifts, exposing firms to significant financial penalties and reputational risk.
GiGCXOs is positioning its AICompliance360 platform as a solution to this problem. The system relies on artificial intelligence to scan and analyze communications for sentiment, tone, and potential regulatory breaches, identifying risks that conventional tools may miss. It provides real-time monitoring across both approved and unapproved channels, issuing alerts when policy violations occur. All communications are automatically archived to meet regulatory standards and can be quickly retrieved in the event of an audit or investigation. The system adapts through machine learning to reflect new communication trends and regulatory changes, keeping surveillance tools effective as technology evolves.
The SEC’s crackdown makes clear that firms can no longer treat off channel communications as an afterthought. By using AI driven systems that monitor, capture, and store all forms of digital interactions, firms can reduce the likelihood of regulatory action while safeguarding their reputations. GiGCXOs argues that AICompliance360 allows firms to stay ahead of these challenges, turning a regulatory headache into a manageable, auditable process.
Contact us today to learn more.
Sources: Carlton Fields SEC LeapXpert